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Trust, Inc.

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Walgreens, the venerable (116 years old, second largest) US drugstore chain, has announced a new tagline as part of a new brand positioning strategy.  No longer will it be “At the corner of happy and healthy” – the new mantra is “Trusted Since 1901.”

Well.

I wish Walgreen’s nothing but the best, and don’t doubt their good intentions. Nor are they necessarily wrong on the facts. And, Walgreens is hardly alone in wanting to trumpet their levels of trustworthiness, or their trusted relationships with customers.

However, the use of “trust” in corporate branding is problematic on at least three dimensions. Walgreens provides a good opportunity to explain why.

Cognitive Dissonance

I always tell people not to call themselves a ‘trusted advisor,’ and certainly not to incorporate the phrase into their advertising. It’s like saying “humility is my best quality.”

Trustworthiness is something of a virtue, and calling yourself virtuous just explodes the claim. It’s wonderful when other people use trust to describe you or your relationship with them – as long as it’s them saying it. (“Trust me” may be the two most trust-destroying words you can say).

Calling yourself ‘trusted’ is also different from calling yourself innovative, or respected, or high quality. Walgreens might want to take note that none of the ”Top 10 Most Trusted Brands” brands incorporate trust itself into their taglines.

They might also take note of how it’s worked our for “The Most Trusted Name in News,” whose tagline allows Donald Trump a convenient foil.

Risky Business

Claiming to be trusted is a bit like the Gary Hart strategy – daring the press to find otherwise. It’s like a red flag to a bull.

How many people will manage to dig up the fact that Walgreens made a substantial amount of money and growth during Prohibition by selling (legally) whiskey? Or that the pharmacy business managed to quickly carve out a very liberal interpretation of “medicinal purposes” during that period? Sorry, Walgreens, it’s what you’re setting yourself up for.

History aside, stuff happens. Ask BP about oil spills, or the old Union Carbide about explosions. Or, closer to home, J&J about Tylenol redux. Mis-steps are magnified, and stay in the press longer, for those who claim to be trustworthy in the first place.

Corporations are Not People

This is the biggest one. “Trust” is a word with much contextual nuance of interpretation. But one thing we can say for sure: personal trust is richer and stronger than corporate trust.

We trust people on an emotional level. We trust people based on our views of their intentions, their transparency, and their willingness to trust us.

By contrast, corporations’ intentions are usually very much self-oriented; transparency is little-practiced; and rare is the corporation without legal disclaimers governing their customer relationships. That’s not a criticism (well, it is a little bit); but it’s mainly just stating the difference between protein-based and legally-based entities and the ways we trust them.

Most corporate executives would probably agree with this in the abstract – but they ignore the implications in the particular. If they really believed it, they would be spending money on becoming more trustworthy, rather than on PR campaigns to be seen as more trustworthy, or on reputation management to change perceptions rather than underlying reality.

So What’s a Company to Do?

A company that is serious about being seen as trust-based would start by recognizing – it’s personal.

Trust is not created by spin, advertising, PR, or taglines. It is created by the collective personal behavior over time of corporate employees interacting with customers, suppliers and each other.

This means corporate trust is a culture-and-values issue – not a process-and-marketing issue.

A company that is serious about trust will, among other things:

  • figure out how to trust its customers and suppliers, often by taking some form of risk (because trust is reciprocal – we trust those who trust us);
  • invest in customer service by focusing on effectiveness, not efficiency; by using ROI, not budget variances, to measure success;
  • hire, train for, and role-model best practices for interpersonal trust, including emotional intelligence, strict truth-telling, and vulnerability;
  • consistently prioritize long-term, relationship-based behaviors over short-term, self-aggrandizing behaviors, in its compensation and promotion policies;
  • focus on ways to establish deeper relationships with stakeholders, rather than focusing on issues like NDAs, non-competes, or arbitration clauses;
  • make heroes out of people who model trust-based behavior.

We trust those more who do not protest how much we trust them.

 

Bleeding Trust from Every Sales Interaction

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Last week saw an impressive uptick in conversations about trust in companies. While United may be the strongest case for bleeding trust today, it’s not limited to them. It’s the massive PR mishaps that grab our attention – but that’s misleading. Trust can affect every business – including yours.

It’s not just about the big, egregious faux pas that loses our customers’ trust in an instant. It’s much more about the myriad little, every-day, seemingly trivial ways that add up – ending in a virtual hemorrhage of trust. In no particular order, let me identify a few.

Customer Tales of Woe

In Goodbye Avis, Hello Uber, danah boyd chronicled death by a thousand cuts at the hand of Avis Car Rental. Her rental car got a flat tire at 10 p.m. in Los Angeles, just seven miles from Los Angeles International Airport (LAX). A customer service phone rep said he didn’t know how long it would take to get an exchange. He said he’d text her. An hour later, she had not received a text, so she called again. They said it would take four hours. Outraged, she pushed back. OK, they said, 90 minutes.

They then suggested she leave the car with the keys in it and get a taxi. She left the car but got a ride from friends to her destination. Avis texted that they’d arrive at 4 a.m. They didn’t. She called again, and Avis blamed the towing company. They said it would take 30 minutes. Ninety minutes later a tow truck arrived.

At 4 p.m. the following day she called to make sure Avis had gotten the car. Nope. They said she was still liable. Roadside assistance told her to call customer service, who said to call the LAX counter directly, who passed her call on to the manager, whose call went to voice mail. He didn’t return the call. And, it went on.

The Avis tale may sound exceptional. But I bet you have your own horror stories to relate that are just as bad. And you probably reacted the same way danah did – by changing suppliers, even though she’d been a loyal customer for years.

One Cut at a Time

Not all customer horror stories have 15 fails in a row in a 24-hour period. But it doesn’t matter. Like little cuts, they can add up, and each one adds its own traumatic toll.

  • I went to trade in a car. We had a deal until the salesman noted a discrepancy on the CarFax report. I said I’d fix it. It took six weeks to fix, but I did get it fixed. However, the salesman never called to ask how things were coming along. Result: I bought my new car elsewhere.
  • A friend went to a store at 5:55 p.m. The manager was inside, locking up for the evening. When my friend pointed to the “Hours: 8AM – 6PM” stenciled on the door and pointed to her watch, the manager shrugged his shoulders and turned away.
  • At my daughter’s wedding, I asked if we could borrow a golf cart for 20 minutes to ferry the bride and groom across the wet lawn for photos so as not to get her wedding dress wet. “Sorry, we can’t afford the liability,” was the answer we received.
  • A friend who does small group communication training sessions is routinely asked by large companies to purchase liability insurance to indemnify MegaCo Inc. against any possible harm or claim of harm from anyone for any reason arising out of his delivering a half-day communication training session. (Many of you face the same exact extortionate policy of your customers offloading “risk” to you and having you pay for the privilege.)
  • Some years ago I had a great first sales discussion with a client about doing training to increase trust in their sales process. At the end of the call, he said, “This is great, we have a deal. Now, I presume you’ll grant us our customary 15% discount?” This after having discussed how to help his salespeople to stop cutting prices.
  • I’ll never forget the brokerage office head who, on hearing about my upcoming talk on being a trusted advisor, said, “Hey, anything that’ll increase my share of wallet, I’m all for it!”
  • I constantly receive offers to write articles for my blog in return for links. Ninety-nine percent of the time, they show no awareness of the subject matter of my blog, much less a sense for what quality levels of content might be expected.
  • Customer service scripts are increasingly being loaded with fake empathy and inappropriate apologies: “Oh, I know you feel,” “Oh, I do apologize for the power outage you experienced. …” No. Don’t pretend-feel. An acknowledgement is critical, but apologizing for things you didn’t do is phony.
  • A corporate online feedback site was generating error messages, sending me “not-deliverable” emails. Acting the good business citizen, I called the corporate 800 customer service number to tell them. The customer service rep told me, “The feedback page is not our department.” When at my suggestion she connected me to that department, they insisted on giving me an incident number so I could track my concern going forward. Wait – my concern?
  • On a United Airlines flight from Chicago to Charlotte, North Carolina, two aircraft were taken off the gate due to equipment problems. The third aircraft finally left three hours late. I emailed the airline. I got back a generic apology and a voucher redeemable against future miles—no acknowledgement of the particular issue, much less suggestions about dealing with it. (That reminds me of my cable company: after showing up three hours late, they’re trained to quickly offer you a $20 rebate – a fair deal only if your time is worth less than $7 per hour).

I could go on and on. And so could you. The cut-cut, drip-drip of such low-level, tedious violations of basic customer relationships adds up. It results in listless relationships at best and cynicism, surliness, and passive-aggressive hostility at worst. Finally, we customers jump ship when the opportunity presents itself.

This isn’t “just” about customer service. There is a steel cable linking all customer experiences – sales, service, whatever – with future sales. How everyone treats customers in all ways at all times is a big driver of trust and thus of revenue.

But you already get that point. The more urgent point is this: how can you be sure you’re not imposing such semi-conscious bloodletting on your customers? Here are two ideas.

1. Follow the 10% rule. At every customer interaction point, take 10% more time to close out the interaction in a trust-creating way.

  • If you couldn’t help someone after a five-minute call, then take 30 seconds to suggest an alternate vendor.
  • If you’re going to spend 15 minutes writing an exploratory letter, then spend another two minutes to find some value-add to include in it.
  • If a potential customer walks out the door after an inconclusive interaction, take a note about a content-specific way to follow up in two weeks with an email or phone call.

You think you don’t have 10% more time? Please. Consider how much you put at risk the other 90% of time you did spend by failing to leave a trust-based impression.

2. Personalize responses in some way. Buying is emotionally triggered, and that’s as true for B2B sales as it is for B2C. Don’t let your last impression be the customer seeing dollar signs in your eyeballs.

  • Responding immediately, or in some hugely fast way, is a powerful tool for showing you’re paying attention when someone reaches out to you. Just don’t automate the response. Fast and customized is a powerful combination.
  • If you are responding to an error, don’t minimize it – but also don’t over-accept responsibility for things beyond your control. Acknowledge, explain what must have happened, and – most important – say what you are going to do on your own to ensure it doesn’t happen again.

Sales don’t just happen during selling. They’re a predictable result of your entire mode of relationship with your customers at all times.

Building the Trust-based Organization, Part I

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Last week, I wrote about why organizations don’t teach trust.  Now let’s move from diagnosis to prescription – let’s delve into how to build a trust-based organization.

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Let’s start by behind honest: do your eyes glaze over at a title like “building the trust-based organization?” Mine do. I always click on such titles, but am usually disappointed when I get what feels like low-content or high fluff-quotient material. So, I set out to tighten up the perspective.

Tentative conclusions: sometimes the issue really is vague, fluffy, fog-sculpting content. But more frequently it’s a “blind men and the elephant” scenario: all describe a key component of the answer, but none have a holistic perspective.

The Parts of the Elephant

The following is not an exhaustive taxonomy, but a great number of pieces about creating trust in organizations do fall into the following five categories. Here are the equivalents of the blind men seeking to describe the elephant of trust.

Trust as Communication.

“Communications is fundamental to earning trust,” says Jodi MacPherson of Mercer in Ivey Business Journal. “At the heart of building trust is the process of communication.”

This approach gets one thing very right; trust is a relationship, not a static set of virtues or characteristics. Hence the connection between parties is key, and communication is the basic way parties relate to each other.

However, the communication approach begs one huge question – the content being communicated.

Trust as Reputation.

The Edelman PR firm’s annual Trust Barometer has been a major communications success.  A sample statement:

Corporate reputation and trust are a company’s most important assets, and must be handled carefully…Beyond safeguarding a reputation, the [2012] Edelman Trust Barometer findings reveal that businesses acquire a greater license to operate as they expand their mission and create more meaningful relationships…By identifying a company’s assets and weaknesses in the realm of trust, we help corporations uncover, define, exemplify and amplify their authentic identity in ways that resonate with stakeholders and inspire support of their business mission.

This approach has one big risk: by equating trust and reputation, the emphasis naturally falls more on managing the perception of the trustor, and less on managing the trustworthiness of the trustee – think Wells Fargo, if you want a succinct example of the danger.  It is also inherently corporate, and therefore impersonal.

Trust as Recipe.

There are probably more approaches that fall into this camp than any other.  It includes lists of (typically 4 – 6) actions, principles, insights, definitions, concepts which, if considered or managed or invented or followed or preached about, result in greater trust in an organization and between that organization and its stakeholders.

A good example is Ken Blanchard Company’s The Critical Link to a High-Involvement, High-Energy Workplace Begins with a Common Language.  They offer  four trust-busters (one of which is lack of communication), five trust-builders, and three rules to building leadership transparency.

Trust as Rules-Making.

In a Harvard Law blogpost titled Rebuilding Trust: the Corporate Governance Opportunity, Ira Milstein points out the critical roles that can be played by boards and shareholders in increasing trust.

A similar point is made from an Asian perspective. In Corporate Governance: Trust that Lasts, author Leonardo J. Matignas says “Corporate governance is not premised on a lack of trust. It simply ensures that trust is accompanied by practices and principles that will further strengthen it.”

While these views may appear slightly narrow, they’re part of a broader governance category that says corporate trust lies in better rule-making. If the game is out of control, we need to clarify the rules, tweak the goalposts, empower the referees, and not be afraid to make changes to the environment in which business operates legitimately as business.

The strength of this view lies in its linkage of business to society – the implicit statement that there is no Natural Law that says business has any right to stand alone outside a broader social context.

Trust as Shared Value.

In Michael Porter and Mark Kramer’s notable 2010 HBR articleCreating Shared Value, Porter performs an eyebrow-raising reversal of his previous work. The author of Competitive Strategy and the Five Forces affecting competitive success boldly charts out a world in which companies take the lead in formulating multilaterally beneficial, long-term projects for the greater betterment of all stakeholders. The lions and the lambs can get along after all, it seems.

Porter and Kramer deserve mention here because they have pinpointed something few others do – an unflinching claim that economic performance at a macro level is consistent with firms behaving at a micro-level in longer timeframes and in more multi-stakeholder collaborative manners. (Incidentally, this view reclaims Adam Smith from the clutches of the Milton Friedmans and Ayn Rands who suggest competition is purely about survival of the fittest, and restores to him a sense of Smith’s broader views as reflected in his Theory of Moral Sentiments).

They are not entirely alone. The Arthur Paige Society some years ago published The Dynamics of Public Trust in Business, which similarly stated:

…trust creation is really an exercise in mutual value creation among parties who are unequal with respect to power, resources, and knowledge. We believe that a core condition for building public trust is the creation of approaches that create real value for all interested parties—businesses and public alike.

Of all the views, Trust-as-Shared-Value is the one most breathtaking in scope. The issue facing it is one of execution. There is a bit of a “then a miracle happens” quality, perhaps inevitable given the scope of envisioned change.

Seeing the Elephant Whole

All the five generic approaches above get something important right – but none of them constitute a full answer to “How do we make trust-based companies?”

So what would constitute a good answer?  It must have three parts: a Point of View, a Diagnosis, and a Prescription.

Crudely speaking, in the list above, Porter/Kramer’s Shared Value is a point of view lacking a prescription. Trust as Rule-Making is a diagnosis without prescriptions or a point of view, and Trust as Recipe is pretty much prescriptive in nature.

In Part II of this post, I offer my suggestion for how to best answer the question across all three dimensions.

 

This post first appeared on TrustMatters.

The Blind Men and the Elephant of Trust

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The Elephant of TrustIn my last post I wrote about the silos that exist between and within business and academia when it comes to trust. There are few subjects outside philosophy for which the question of subject matter definition is so important as it is in the case of trust.

Like the tale of the blind men and the elephant, each party sees an important part of the subject of trust – but then is inclined to view the rest of the world in those terms. As the saying goes, if you have a hammer, the world looks like nails.

So this is my attempt to define the differing perspectives on trust, looking across the fields of business and academia. I welcome your additions or comments.

I identify four important views of trust, and I’ll label them by the best-known holders of those viewpoints. They are distinguished mainly by differing focus on the trustor, the trustee, and the resultant trust, as well as by individual, social or institutional trust.

The Psychologists’ View

The psychologist’s view focuses on the perception of an individual person facing the decision to trust. In the words of Mayer, Davis and Schoorman in an oft-cited 1995 article, trust is:

the willingness of a party to be vulnerable to the actions of another party based on the expectation that the other will perform a particular action important to the trustor, irrespective of the ability to monitor or control that other party.

This is a model built around an individual trustor, not a trustee, and in particular about the trustor’s assessment of the trustee’s competence, integrity and benevolence. It’s my impression that this model is typically portrayed in a rational, self-good-maximizing context, comfortable to behavioral economists, for example.

If you search Twitter streams – the democratic way of market research – this is also the most common use of the word ‘trust.’ The twittersphere is full of “don’t trust women, they break your heart,” or “when people lie to me I can’t trust them.” (Though note: twitter users are a whole lot more affective or emotional than the usual behavioral model allows for).

An interesting application of this trustor-centric viewpoint beyond the individual to the corporate perspective is Bob Hurley’s The Decision to Trust, where he deals with group decision-making and cultural factors that affect trusting behavior in the company.

The Political Scientists’ View

Political scientists like Uslaner or Fukuyama also focus on the trustor’s viewpoint, but focus on groups of trustors (e.g. nations, or cultures), and on their willingness to trust generally, e.g. their inclination or propensity to trust strangers. It is from this viewpoint that we read about the greater levels of trust in the Scandinavian countries, or the lower levels of trust in southern Italy or in Wall Street trading firms.

Uslaner calls this generalized trust, something measured in the General Social Survey for decades; it changes slowly, unlike trust in specific people or institutions.

The Corporate Virtues and Values View

Where psychologists focus on the trustor’s decision to trust (a verb), business tends to focus on the trustee’s trustworthiness (a noun). At an individual level, that might be called virtues; at a group level, values.

In my own model, co-developed first in The Trusted Advisor, the Trust Equation is the expression of the the individual virtues of trustworthiness – credibility, reliability, intimacy, and other-orientation. At an organizational level, the Trust Principles are the articulation of group values in my own construct.

A recent example of this viewpoint is PwC Chairman Dennis Nally’s article The Trust Agenda. It focuses on creating value through values, and on creating greater trustworthiness from within; and not much at all on the issues of trusting.

The focus on virtues and values is an obvious one for business, which for the most part is more concerned about being trusted than trusting. Of course, being trustworthy alone isn’t sufficient to make trust happen – you need a trustor. Business in general focuses on the trustor role mainly through the eyes of the trustee, just as psychology tends to view the trustee largely through the eyes of the trustor.

Business and academics alike have trouble defining institutional trust; it makes a little bit of sense to say we trust Citibank (or not), but very little sense to say that Citibank trusts us. Both trusting and being trustworthy are largely individual traits.

The business focus on the trustee therefore makes “a trustworthy organization” at least conceivable, whereas the academics’ focus on the trustor makes “a trusting organization” problematic. The answer, I suggest, is to frame trust issues at the organizational level as being about creating trust-enhancing environments – not just about trustworthiness, and certainly not about abstract entities committing human acts of trusting.

There is one important attempt to rigorously identify objective characteristics of trustworthiness at a corporate level; it is the FACTS model of Trust Across America. It is the most data-based proof I know of the corporate-wide profitability of trustworthy behavior.

The State of Trust View

What happens when you measure the result of the interaction between trustor and trustee? You get something like the Edelman Trust Barometer, which is known for drawing conclusions like “trust in banking is down.”

This is a survey approach to trust. It doesn’t try to distinguish lower trustworthiness in bankers from lower propensity to trust by consumers, but instead precisely tracks the net result of that interaction.

Numbers in the State of Trust view are constantly changing (unlike in the political scientists’ view), because the object of trust is very specific (an industry, a government sector), and there is an implied specific action. Asking “do you trust Amazon” presumes a very specific object of that trust – typically to buy books or to guard data. It doesn’t occur to us to trust Amazon with our babysitting.

By contrast, numbers in the political science view change slowly because, as Uslaner puts it, if I punch you in the face, your trust in me may decline, but your trust in the human race is pretty much unaffected.

The Role of Risk

There can be no trust without risk, Ronald Reagan’s “trust but verify” statement notwithstanding. Risk is implicit in the Corporate Virtues and Values view, and explicit in the other three.

In the corporate realm, partly because of the focus on being trusted, companies have confused risk eradication with increasing trust. There is a vicious paradox of trust – the more either party tries to control risk, the less trust results. Companies who think they are increasing trust by risk mitigation and compliance programs are doing just the opposite – they are eroding trust.

The challenge for business –recognize the role of trusting, both within the organization and outside it.

In the academic realm, partly because of the focus on trusting, it’s difficult to account for the boomerang effect of greater trustworthiness that results from being trusted. People have a way of confounding rational-choice models when it comes to trust.

The challenge for academia – recognize the roles of virtues and values in their own terms, not just through the eyes of the risk-taking trustor.

What business can learn from academia: a structured, disciplined approach to studying issues of trust.

What academia can learn from business: a wealth of real-world data to be studied and understood.

————————
So there you have it – my attempt to describe several of the blind men feeling the elephant of trust.

What’s your take on it?

Building the Trust-based Organization

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The Elephant of TrustDo your eyes glaze over at that title? Mine do. I always click on such titles, but am usually disappointed when I get what feels like low-content or high fluff-quotient material. So I set out to tighten up the perspective.

Tentative conclusions: sometimes the issue really is vague, fluffy, fog-sculpting content. More often, however, it’s more a situation of the blind men and the elephant: all describe a key component of the answer, but none have a holistic perspective.

The Parts of the Elephant

This is not an exhaustive taxonomy, but a great number of pieces about creating trust in organizations do fall into these categories. Here are the equivalents of the blind men seeking to describe the elephant of trust.

Trust as Communication. “Communications is fundamental to earning trust,” says Jodi MacPherson of Mercer in Ivey Business Journal. “At the heart of building trust is the process of communication.”

This approach gets one thing very right; trust is a relationship, not a static set of virtues or characteristics. Hence the connection between parties is key, and communication is the basic way parties relate to each other.

However, the communication approach begs one huge question – the content being communicated.

Trust as Reputation. The Edelman PR firm’s annual Trust Barometer has been a major communications success.  A sample statement:

Corporate reputation and trust are a company’s most important assets, and must be handled carefully…Beyond safeguarding a reputation, the 2012 Edelman Trust Barometer findings reveal that businesses acquire a greater license to operate as they expand their mission and create more meaningful relationships…By identifying a company’s assets and weaknesses in the realm of trust, we help corporations uncover, define, exemplify and amplify their authentic identity in ways that resonate with stakeholders and inspire support of their business mission.

This approach has one big risk: by equating trust and reputation, the emphasis naturally falls more on managing the perception of the trustor, and less on managing the trustworthiness of the trustee.  It is also inherently corporate, and therefore impersonal.

Trust as Recipe.  There are probably more approaches that fall into this camp than any other.  It includes lists of (typically 4 – 6) actions, principles, insights, definitions, concepts which, if considered or managed or invented or followed or preached about, result in greater trust in an organization and between that organization and its stakeholders.

A good example is Ken Blanchard Company’s The Critical Link to a High-Involvement, High-Energy Workplace Begins with a Common Language.  They offer  four trust-busters (one of which is lack of communication), five trust-builders, and three rules to building leadership transparency.

Trust as Rules-Making. A Harvard Law blogpost titled Rebuilding Trust: the Corporate Governance Opportunity, Ira Milstein points out the critical roles that can be played by boards and shareholders in increasing trust.

A similar point is made from an Asian perspective, in Corporate Governance: Trust that Lasts, author Leonardo J. Matignas says “Corporate governance is not premised on a lack of trust. It simply ensures that trust is accompanied by practices and principles that will further strengthen it.”

While these views may appear slightly narrow, they’re part of a broader governance category that says corporate trust lies in better rule-making. If the game is out of control, we need to clarify the rules, tweak the goalposts, empower the referees, and not be afraid to make changes to the environment in which business operates legitimately as business.

The strength of this view lies in its linkage of business to society – the implicit statement that there is no Natural Law that says business has any right to stand alone outside a broader social context.

Trust as Shared Value. In Michael Porter and Mark Kramer’s notable 2010 HBR article Creating Shared Value, Porter auto-performs a conceptual sex-change operation on his previous work. The author of Competitive Strategy and the Five Forces affecting competitive success boldly charts out a world in which companies take the lead in formulating multilaterally beneficial, long-term projects for the greater betterment of all stakeholders. The lions and the lambs can get along after all, it seems.

Porter and Kramer deserve mention here because they have pinpointed something few others do – an unflinching claim that economic performance at a macro level is consistent with firms behaving at a micro-level in longer timeframes and in more multi-stakeholder collaborative manners. (Incidentally, this view reclaims Adam Smith from the clutches of the Milton Friedmans and Ayn Rands who suggest competition is purely about survival of the fittest, and restores to him a sense of Smith’s broader views as reflected in his Theory of Moral Sentiments).

They are not entirely alone. The Arthur Paige Society a few years ago published The Dynamics of Public Trust in Business, which similarly stated:

…trust creation is really an exercise in mutual value creation among parties who are unequal with respect to power, resources, and knowledge. We believe that a core condition for building public trust is the creation of approaches that create real value for all interested parties—businesses and public alike.

Of all the views, Trust-as-Shared-Value is the one most breathtaking in scope. The issue facing it is one of execution. There is a bit of a “then a miracle happens” quality, perhaps inevitable given the scope of envisioned change.

Seeing the Elephant Whole

All the five generic approaches above get something important right – but none of them constitute a full answer to “How do we make trust-based companies?”

So what would constitute a good answer?  It must have three parts: a Point of View, a Diagnosis, and a Prescription.

Crudely speaking, in the list above, Porter/Kramer’s Shared Value is a point of view lacking a prescription. Trust as Rule-Making is a diagnosis without prescriptions or a point of view, and Trust as Recipe is pretty much prescriptive in nature.

In Part II of this post, I offer my suggestion for how to best answer the question across all three dimensions.

Why We Don’t Trust Companies Part IV: The Solution

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Solving The PuzzleMy last three posts – here, and here, and here – were about why we don’t trust companies. To review the bidding, I’ve said it’s because:

  • Trust is predominantly personal in nature – a fact most companies don’t recognize
  • Corporate missions, motives and mindsets are all tainted by zero-sum, competitive ideologies
  • Trust requires risk, while companies abhor risk.

Stripped down – companies see trust as impersonal, ideologically suspect, and too risky.

Now, if I am right about that, then we would want to see solutions in the business world that recognize the personal nature of trust, incorporate trust-enhancing ideologies, and embrace risk-taking to enhance trust.

Surprise surprise – that’s not what we see.

The dialogue about corporate trust is consistently mis-framed. It is not companies that trust, or are trusted. It is the people in the companies who trust, or are trusted. The challenge is not to make companies trust or be trustworthy – it is to create corporate environments in which people can trust and be trusted.

In the trust game, the company is an agent, an enabler – not a primary actor.

The Usual Recommendations to Increase Corporate Trust

I spend a lot of time reading reports on how trust in business can be improved. Here are a few examples;

Believe me, there are hundreds more.

These are all reasonably good pieces of work (there are certainly worse). But even from these top-drawer sources, the top-line recommendations are bloodless, abstract, and cold – because they’re focused at the corporate level. (Curiously, the right answers in all four of these cases are in fact contained in the reports – they’re just buried deep.)

Typical topline recommendations look like these (taken from the sources above):

  • Increase adherence to ethical codes and standards
  • Create a set of values that define and clarify what your enterprise and its people are at root, and work to ensure that these values are adhered to consistently across your enterprise.
  • A well-defined, repeatable roadmap for the conversation…more transparency about fees and costs
  • Communicate frequently and honestly on the state of the business.

Again – there’s nothing wrong in these recommendations. But taken alone, they are sleep-inducing; they sound like Charlie Brown’s teacher’s Mwah, Mwah, Mwah.

Where is the personal? The belief system? The risk-taking? Where’s the people?

The Right Answer for Increasing Corporate Trust

Again, not that there’s anything wrong with the suggestions above, but they don’t get to the heart of the matter. Here are some recommendations that do.

1. Trust is personal – so lead by example.

Role model it. Everyone, not just the top leaders.  And to be sure what “it” is, identify hundreds of situations and the appropriate responses for each (not to memorize, but to ensure understanding). Talk about them – endlessly.  Get coaching. Do brainstorming sessions. Talk about what you’re doing with employees, and with customers. Identify key vocabulary terms you’ll use, and use them. Publicly praise and private counsel appropriate personal examples of trust-based interactions.

The way to get a trust-based company is not to fix the company – it’s to fix the people and the environment they live in so that the people can trust and be trusted in all their affairs.

2. Articulate and preach the trust ideology.

Reject zero-sum thinking. Think long-term relationships, not short-term transactions. Make transparency a default state in all conversations (except where illegal or harmful). Emphasize win-win solutions with customers, employees, and other stakeholders. Believe that trust relationships are more profitable over the medium and long-term, that they are complementary not opposed to corporate success.

3. Teach Social Risk-taking

People can’t learn to trust if they have no degrees of freedom to do so. People are more likely to be trustworthy if they are trusted. Human relationships are formed by the constant reciprocal taking of small risks; the result is long term risk mitigation.

There are personal relationship skills that drive trust. They can be taught, and the teaching of them gets to the heart of a trust-enhancing organization.

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The route to a high-trust organization is through its people. That route starts not with corporate policies per se, but with human interactions.

 

 

Why We Don’t Trust Companies, Part II – the Three M’s

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light bulb: Mission, Motives & MindsetsYesterday I wrote about three fundamental reasons that most companies aren’t trusted: trust is mainly personal, most companies don’t understand trust, and they make bad choices of tools to enhance trust. Let’s call that Level I of  the Corporate Book of Being Trusted. Now let’s look at Level II.

Most companies, even if they do reasonably well at Level 1, are still not very trusted. It’s often due to what we might call the three M’s – mission, motives and mindset. If your goals, beliefs and attitudes are all anti-trust – even if you think you mean well – then no matter what you say, it will bleed through. People can tell. And it’s people that do the trusting.

Mission.

I’m using the term “mission” loosely here, to include terms sometimes defined as distinct – vision, goals, and the like. Basically, what a company says it’s trying to do.

And despite the ringing statements of companies like Coca Cola (“…to inspire moments of optimism and happiness…”) and Enron (you really must read it for yourself), most companies in the past few decades would cop to “achieve sustainable competitive advantage,” (often dressed up as “be the best X in the Y business”).

Sustainable competitive advantage. Never mind whether that’s true, or whether the true underlying motive is to maintain the bureaucracy until the incumbent management has had its way. Let’s assume it is true. What does “sustainable competitive advantage” (hereafter, SCA) imply?

It says above all that business is a contest, and a largely zero-sum contest at that. It’s about winning, and what I win, I win by dint of you losing. And vice versa. As was very well articulated by the strategists from the 70s and 80s, this is a Hobbesian view, in which everyone is a competitor lying in wait to conquer us. And so we must conquer them first.

Much more could be said about this as a mission, but let’s stick with one observation – it is extremely hard to believe in all that and believe at the same time in the power and desirability of trust. People who believe in SCA are hard-pressed to believe that they might make alliances with suppliers, customers and even competitors, that they might benefit by greater transparency, that taking risks can be desirable, and that another goal besides winning might actually exist.

Most corporate people  just can’t wrap their heads around that.  And so they, and their companies, behave in anti-trust ways.

(There is, of course, a great irony here. Companies which actually do a better job of being trusted end up being more profitable and successful. But the power of the ideology is such that most corporations refuse to believe it).

Motives.

It’s almost an axiom in business that the purpose of a company is to make a profit. And even though few people now believe it as dogmatically as Milton Friedman asserted it’s pretty much an important goal, and rightly so. The problem comes from those who have boiled it down, stripped it to the bones, and turned it into Management Mantras Lite.

They have put a lot of emphasis on two beliefs: the primacy of shareholder value, and the short term perspective. As to shareholder value, Cornell Law School Professor Lynn Stout says, “the ideology of shareholder value maximization lacks any solid foundation in corporate law, corporate economics, or the empirical evidence.” So the belief is unnecessary, and unfounded. Yet it continues.

It is also anti-trust, because it subordinates the goals and desires of all other stakeholders.  Who can trust an entity that uses others as means to its own ends – and brags about it!

Short-termism is a long topic in itself. Let’s just note that the passage of time is a requirement for many forms of trust. Game theory shows distinctly different results if a game is played once, vs. many times. Over time, we can establish patterns, mutual obligations, track records and character.

Short-termism hobbles trust considerably; the accompanying belief in transactions rather than relationships is enough to strangle trust.

Mindset.

Some mindsets flow naturally from the missions and motives outlined above; see how many you have heard:

  • I’ll be gone, you’ll be gone – do the deal
  • Do unto others before they do unto you
  • It’s a dog eat dog world.

There is one other mindset I want to identify; I’ll write about it separately in this series. It is risk. In the Hobbesian corporate world we have created, risk is a no-no, a negative, something to be mitigated and hedged. Risks are to be laid off, written into supplier contracts so they’re transferred, and are not to be taken if they might result in legal or financial exposure – hence never admit guilt. Hence “nobody ever got fired for hiring IBM.” And so forth.

Yet trust requires risk. There can be no trust without risk. And a mindset that abhors risk is not a mindset that will easily tolerate trust.

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In short: at Level I, we saw that most companies are impersonal, and don’t understand the workings of trust. At Level II, we see that many mental constructs in today’s corporations are inimical to trust.

Is it any wonder that most companies are not trusted?

 

Why We Don’t Trust Companies Part I

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"Trust Me" (photo by Nancy Xu)People don’t trust companies very much.

Sure, we trust some companies more than others, and sometimes we trust them more than government (sometimes not), but when you think of someone you trust, a corporation tends not to come first to mind.

There are three simple, powerful, obvious reasons for this – every one of which tends to get ignored by corporations. Who then wonder why they’re not trusted.

Reason 1: Trust is Heavily Personal

Very few companies bother to make a simple distinction – that between trusting and being trusted. It takes both to create trust.

Only people can do trusting. To trust another is an act of will, not of policy or odds-making. Corporations, notwithstanding what Mitt Romney and the US Supreme Court ruled, cannot in any intelligible manner be said to “trust” others. It’s a human thing.  So right there, half of trust can only be done by humans.

The other half, trustworthiness, also applies largely to humans. We might say, “I trust the sun will rise tomorrow,” but when it does, you don’t get much credit for your courageous risk-taking. You may trust Amazon to predict your book preferences, but that doesn’t mean you’d trust Amazon to make sales calls for you or set you up on a date.

Trust is hugely contextual, and the few contexts in which we “trust” a company tend to be very bloodless, relying largely on predictability of behavior. And it doesn’t run deep.

Trust is personal, and companies aren’t. Sorry, companies.

Reason 2: Companies Don’t Understand Trust

I noted above that companies rarely distinguish between something as basic as trusting and being trusted. Therefore, if they score low on trust surveys, they can’t tell whether the solution lies in being more trustworthy, or in being more trusting.

By default, most of them implicitly assume the issue is trustworthiness. This means they completely pass up opportunities to create trust by trusting their stakeholder constituencies, or by valuing the propensity to trust within the organization. Worse, they may even harm trustworthiness by assuming that it requires greater internal controls, thus limiting employees’ ability to be trusting.

Trust is contextual, and companies tend to be very vague about it. Sorry, companies.

Reason 3: Companies Choose Trust Tools Badly

Most companies confuse trust with reputation. They view it as a communications problem, something to be handled by PR, especially in times of crisis. Trust problems are addressed by amping up the messaging.

Most companies, if they think about increasing trust, will instantly phrase the issue in terms of measurement.  How do you measure it, what metrics can be developed to track it, and how do we manage to the metrics?

Most companies, to go along with their metrics, favor processes and policies as a way of increasing trust. We will review this 4 times, no Xs will go out without Ys, we celebrate Q and we will not tolerate Z.

But trust doesn’t work that way. Since trust is personal, it is transmitted largely through character, role-modeling, values, conversations, personal transparency, integrity, constructive confrontation, public praise and shaming, and mutual respect. How many corporate programs can you identify that use those as tools?

The one communications policy that positively affects trust is transparency; yet it is often sacrificed for message control, which predictably reduces trust. Reputation doesn’t drive trust – trust drives reputation, in any sensible time-frame past a fiscal quarter or two.

The measurement of trust is simply not as important an issue as companies make it out to be. We don’t measure love, and love seems to do fine without it; in fact we would be suspicious of people who purport to be able to measure love, much less do it quarterly, monthly and weekly. You do not need to measure trust in order to manage with it – see the list above of how it works.

Finally, policies and procedures are inherently impersonal. Other than creating greater predictability, is it any wonder they don’t affect trust? In fact, if you get enough policies and procedures, it makes everyone confuse compliance with ethics, and you end up with reduced trust.

There are many reasons we might not trust a company, or companies in general. But the biggest reasons are because we’ve defined the problem wrongly at the very outset.